MinnesotaCare basics
History
MinnesotaCare was created in 1992 by Republican Governor Arne Carlson and a bipartisan coalition of legislators. The program provides health care coverage for about 83,000 Minnesotans who earn too much to qualify for Medicaid but whose incomes are below 200 percent of the federal poverty line. (A family of three below 200 percent of the federal poverty line is earning roughly $40,000 per year.)
MinnesotaCare is considered a “Basic Health Program” under federal law, allowed under Section 1331 of the Affordable Care Act. The law permits states to purchase coverage directly for people by pooling the premium tax credits and cost-sharing reduction subsidies they would have otherwise received in the individual insurance market.
Today, MinnesotaCare enrollees pay no more than $80 per person per month in premiums and are guaranteed very low out-of-pocket costs. MinnesotaCare coverage is more affordable and comprehensive than insurance available on the individual market. The program delivers a more broad set of benefits than those required by federal law, including dental, vision and comprehensive behavioral health services.
On average, 83,000 Minnesotans purchase their coverage through MinnesotaCare.
MinnesotaCare financing
MinnesotaCare is financed with enrollee premiums, federal funding and state funding from the state’s Health Care Access Fund.
As a Basic Health Program, MinnesotaCare receives 95 percent of the premium tax credits that enrollees would have received if they purchased insurance through the health care marketplace. MinnesotaCare’s federal funding comes from premium tax credits, which are pegged to the cost of insurance premiums in the individual market. When premiums go down, MinnesotaCare’s federal funding goes down.
In March 2017, the Minnesota Legislature passed a bill to create a state-funded reinsurance program to address rising premiums in the state’s individual insurance market from Jan. 1, 2018, to Dec. 31, 2019. By design, the reinsurance program reduces premiums in the individual market. As a result, MinnesotaCare’s federal funding decreased by $90.5 million in plan year 2018 because of reduced premiums from the reinsurance program.
The coming sunset of the state’s provider tax eliminates the largest source of state revenue for the Health Care Access Fund, which is a significant funding concern.
Who is eligible?
MinnesotaCare provides coverage to people who do not have access to affordable health insurance and have higher income levels than those eligible for Medicaid. Coverage usually begins the month after enrollees pay their premium.
To access more detailed information about income eligibility limits in the MinnesotaCare program, see the income and asset guidelines.
How are MinnesotaCare services purchased and delivered?
MinnesotaCare enrollees get services through a health plan. They can choose their health plan from those available in the county where they live.